We always knew that Brexit would be a major problem for airlines in 2017 and beyond but this is beginning to solidify as Spain begins to prepare for a show-down over Gibraltar. Spain has indicated that it would be willing to test the UK and the rest of the EU by blocking any UK/EU air access deal unless terms exclude Gibraltar airport. Madrid has signalled that it will veto UK access to the EU’s single aviation market unless a deal excludes Gibraltar airport. This is very strong stuff – Spain is prepared to risk crushing its own tourist industry and housing market by toying with UK access to the EU open skies in a manner that it knows full well the UK will never agree to. So is a UK/EU open skies agreement post-Brexit impossible? On these terms the answer has to be yes.
So what is the problem for Spain and does it have a sound argument? “Any EU agreement with the UK on aviation cannot apply to the airport of Gibraltar,” said one Spanish diplomat quoted in the Financial Times newspaper. “A deal that is applicable to the airport of Gibraltar would imply recognition of the legal right of the UK to the territory.” In fact this argument is already delaying EU aviation regulation updates and has been for some time. The EU Passenger Rights Agreement, for example, has been delayed for over three years, so this problem is not new. Spain argues that Gibraltar airport is illegally located on Spanish land. It says the 1713 Treaty of Utrecht, which ceded the town, castle and port of Gibraltar to Britain, did not include the rights to the isthmus on which the airport is built.
The problem for British Airways, easyjet, Monarch, Jet2 and other UK airlines such as Flybe, is that only UK membership of the European Common Aviation Area, which spans the EU as well as some non-EU countries, would continue to provide unrestricted access to all EU destinations. Easyjet has opened an EU base to circumvent any regulatory changes post Brexit, but it will fail on EU ownership regulations at present once the UK leaves. 2017 will tell us if Brexit really is going to be a very nasty affair or if all this positioning is nothing more than scaremongering and bluster. UK-based airlines will have to prove soon, maybe now, that they are Brexit-proof, but moreover we have to all consider this very stark warning: Ryanair, easyjet, IAG and many other European airlines have moved aircraft from North African and Turkish routes – those routes affected by terrorist activity – onto routes into holiday destinations going into Spanish territories; are we to see passenger traffic fall away for transits to Spain too? If we do then there will be huge overcapacity in the European market for summer 2017 – Maybe it is a good year to own a hotel in Malta?
It is not just airlines of course: MROs in the UK need to have EASA oversight continue after Brexit or else no work will be recognised by EU authorities since there will be no official standard. There can be no doubt that the UK will have everything in hand to ringfence aviation over the coming months from Brexit talks, but this news about Spain using its veto will scupper any such deal. As such the UK might have to resort to its own war of words against Spain in the press to ensure that the value of UK tourism and UK citizen home ownership in Spain is brought into the fight, which will affect transits between the UK and Spain in 2017.Date: February 14, 2017